Sales Tax Updates in North Carolina

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January 2, 2013 — 1,252 views  
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The North Carolina general sales tax rate remains at 4.75 percent. Most statewide rates remain the same, with 3 percent sales for boats and aircraft with a maximum tax of $1,500 and a 2 percent rate for manufactured homes, up to a maximum of $300. Nonexempt food items continue at the general sales tax rate and a 2 percent local rate applies for qualifying food sales.

Local Rate Changes

• Henderson County has added an additional 1 percent levy on gross receipts from lodging establishments. This is in addition to the occupancy tax now in effect;
• Jackson County has received an extension to levy and additional 3 percent tax on receipts derived from hotels and motels. The extension to levy the tax is now January 1, 2013;
• Fontana Dam Town Council was given permission to levy an occupancy tax of up to 3 percent for gross receipts of lodging establishments. The occupancy tax is in addition to any state sales tax that may apply. Nonprofit organizations are exempt if their rental is consistent with their nonprofit purpose.

Warning Against Fees Charged for Obtaining a Sales Tax Registration Number or Certificate of Registration

The Department of Revenue issued a warning bulletin regarding third party entities that charge a fee for obtaining a North Carolina sales or use tax resale number. The Department of Revenue reminds people that obtaining a Certificate of Registration for Sales and Use Tax is a free service offered by the department.

Personal Liability of Responsible Persons for Sales Tax Liability

A Department of Revenue, in a tax case this year, made clear that managers, officers, and directors of a business can be held personally responsible for the entities sales and use tax obligations.

The taxpayer was a manager and member of a limited liability company, and owned approximately 32 percent of the company. He was one of 2 managers for the company, but did not have access to the company bank account and was not authorized to sign checks. He did sign the company’s annual report and was identified as a manager in the Board of Directors minutes.

From 2008 through 2010, the company had failed to pay approximately $15,000 in state and local sales tax, though it collected the same. Though the manager did not have knowledge that the sales tax collected had not been remitted to the Department, as a responsible person, he was liable for the tax, penalties and interest.

The department pointed out that a manager of a limited liability company is a responsible person under N.C. Gen. Stat. § 105-242.2(a)(2)b. It further pointed out that the responsible person statute does not require specific duties be assigned to a manager.

Miscellaneous News

The Department reported that it is in compliance with the Streamlined Sales and Use Tax Agreement and issued a Certificate of Compliance on November 7, 2012. In addition, it issued a new taxability matrix which can be found at http://www.dornc.com/taxes/sales/nc_taxability_matrix_10-12.pdf

 

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